PJM Interconnection, the country's largest grid operator, is currently running a "campaign"--a PR stunt, actually--in the face of withering criticism about its inability to maintain sufficient electricity generating resources, and the fact that its governance, market design, and tariff have foisted massive data center costs onto "ordinary" residential and small business customers. (In fairness, also onto large commercial ratepayers, just not the billionaire techbros who own the data centers.) This is reflected, again, in the results of the just-announced capacity auction for the 2028/29 delivery year and the $16.4 billion total cost that ensures high electricity bills for PJM’s 67 million customers.
The stunt hardly even makes sense--almost no one except industry insiders even knows that PJM exists; it's not listed on electricity bills, and media coverage of PJM is opaque to the general public. When ratepayers are angry about their rising bills, or when their power goes out, they don't call PJM--they call their local monopoly utility. And they have no idea about the extent to which transmission owners are calling the shots (they don't even know what TOs are).
Anyway, every regional grid operator has an independent market monitor (IMM) that oversees it; PJM's is Monitoring Analytics, Inc. and here's what it told PJM on June 30 of this year: "The most important criterion for evaluating proposals to address how to reliably serve new data center load is the assignment of the costs and risks associated with LSEs serving data center load. For example, the failure to exclude new data center load from the BRAs, as PJM proposes, would by definition impose significant costs on other customers and therefore violate the basic principle that data center costs should not be imposed on other customers. The rules must protect just and reasonable pricing for capacity that serves existing customers. To date, the capacity costs imposed on existing customers by data centers have been $23 billion." And that's just ONE category of costs.
The bottom line (and some of this is also inside baseball):
- Price signals have failed for three consecutive auctions.
- New generation entry has collapsed.
- Data‑center load has already overwhelmed the system.
- PJM is two auctions behind schedule.
- The "backstop procurement" is an open admission of failure.
- The IMM is openly calling PJM’s proposals chaotic. Insiders say that's an understatement.
- FERC commissioners publicly question PJM’s governance and management.
- FERC Order 2000's "Basic Independence Principle" for RTOs/ISOs is clearly not being adhered to.
All the PR stunts imaginable can't change these facts. And if things don't change, soon, the grid will NOT be "Always On." In IMM's words from last November 10, referring to one of PJM's proposed market solutions: "PJM will be in the position of allocating blackouts rather than ensuring reliability."
In fairness, PJM used to be what many industry insiders believed was the most well-designed energy market, and probably in the world. When I worked closely with the grid operator from 2009 to 2018, it was a consistently disciplined, technocratic, market‑driven, as-needs innovative (After the 2014 polar vortex), professionally-run organization, and widely respected by FERC, Congress, and virtually every market participant. Over the last three years--with the concomitant and massive rise of AI data centers--that changed. It's almost unrecognizable now,
Little advice to PJM? You CAN do a campaign that makes sense. This one doesn't, and is clearly written to appease some of your stakeholders. It won't work, and the public will continue to push back on, if nothing else, their rapidly rising electric bills. They are NOT going to look at these inscrutable ads and think "it's great how PJM is looking out for me."
But, of course, a successful campaign has to reflect genuine, concrete, and meaningful change above all. That has yet to happen.